CEPR - Center for Economic and Policy Research


En Español

Em Português

Other Languages

Home Publications Blogs Beat the Press The Washington Post Deep Sixes Financial Transactions Taxes

The Washington Post Deep Sixes Financial Transactions Taxes

Wednesday, 21 April 2010 15:50

In an article that discussed an IMF report on new taxes on the financial industry the Washington Post referred to a "financial activities Tax" (FAT) proposed by the IMF and said that: "The IMF's proposed fees would raise more money than the other options under debate, with an emphasis on discouraging the type of risk-taking that caused the recent crisis."

This is not true, a financial transactions tax (FTT), like the ones put forward in recent bills by Iowa Senator Tom Harkin and Oregon Representative Peter DeFazio, could raise more than $100 billion a year. This is considerably more money than the amount that would be raised by the FAT at the levels suggested by the IMF.

Remarkably, this article contains no mention of the FTT even though one of the main purposes of the IMF report was to assess its merits. The IMF unambiguously concluded that an FTT was an administratively feasible tax, directly contradicting one of the main objections put forward by many officials in the Obama administration and other opponents of the tax. Although the IMF report indicated its preference for the FAT, its assessment of the FTT's feasibility undermines one of the main arguments against the tax. This fact should have been noted in the article.



Comments (4)Add Comment
written by izzatzo, April 21, 2010 5:55
The FTT recovers more, and the FAT recovers less, and the FTT cost less to tax, and the FAT costs more to tax, and the FTT has less deadweight, and the FAT has more deadweight, so the FAT is second best, and the FTT is first best.

But the FTT is still suppressive when compared to the FAT, because neither is regressive and both are socialistic, as they interfere with with markets and the speculators' wishes, making forward signals backwards and the traders go ballistic.

It's a Dr Seuss Tax, a CAT in the HAT, a PIG in a POKE, a BIG GOVERNMENT JOKE. How are we the people going to STARVE THE BEAST that eats us when taxes go up and up and there's no moment of COME TO JESUS.

Let the traders be, in pursuit of speculation, free of petty taxes and onerous regulation, invisible hands are they, doing God and Goldman's work, lifting all boats to heaven with MARKET IMMACULATION.
written by bobbyp, April 21, 2010 10:44
Aye, Izzatzo, a veritable ejaculation of miraculous immaculate cornocopiate financial transubstantiation, but hands free? Really?

I doubt therefore I yam.
written by Queen of Sheba, April 22, 2010 3:35
What kind of slime is being injected into the drinking water at the Washington Post? Their business and finance articles more and more frequently lack depth and background, and sometimes even distort information to elicit a desired perspective. It might be the writers, it might be the editors, but some group at that paper is beginning to resemble pod people.
written by mbt kisumu white, July 23, 2010 3:09
It's so lucky for me to find your blog! So shocking and great! Just one suggestion: It will be better and easier to follow.

Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.


Support this blog, donate
Combined Federal Campaign #79613

About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.